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The Beginning of the Drawdown

July 2, 2020

In previous weekly highlights and various of our reports, we have discussed potential scenarios regarding the development of floating storage for crude oil and products.  Specifically, we projected that given the OPEC+ cuts, observed balances and the expected demand recovery after the pandemic lockdowns, floating storage would reach a peak in June and ships would start discharging and re-entering the trading fleet by July.  As we are now “officially” in the second half of the year, we are going to take a look at floating storage in the VLCC sector.
We have been monitoring VLCC tankers using satellite data and ...

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The Small Surprises in the US Crude Export Market

June 26, 2020

There have been too many “surprises” in 2020 with the world spinning to the rhythm of a pandemic and major geopolitical shifts.  This week we are looking deeper into the US market and some unexpected developments in the US crude export market.
We have seen that the combination of a huge drop in domestic demand with the low oil prices and the deep cuts from OPEC+ have all played a role in crude exports from the country to not suffer as much as initially expected.  According to the latest data from the Energy Information Administration (EIA), total US crude exports ...

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An Updated Look on Crude Balance

June 19, 2020

We are almost at the end of the second quarter of 2020 and the effects of OPEC+ implementing the biggest production cuts in history are becoming clearer.  The structure of the cuts is now common knowledge, except for a change that was decided in a recent virtual meeting among OPEC and Russia.  The organization and it allies agreed to extend the 9.7 million b/d cuts for one additional month until the end of July.  The decision was made to better mitigate the oversupply issues caused by persistent low global oil demand and to allow for Nigeria, Iraq to ...

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Another Black Swan Event in the Making?

June 12, 2020

We have not been short of “black swan” events since the start of 2020 with the market swaying from one side to another and traders and analysts alike redoing projections almost every month.  This week had another potentially major event unfolding with the sanctioning of four ship-owning entities by the US’ Treasury Dept. Office of Foreign Assets Control (OFAC).  The sanctions were brought upon tankers that loaded and transported Venezuelan crude oil between February and April 2020.  There are multiple ways to look at the event and projections in the market and we will explore a few of them here ...

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US Crude Exports May Find Support in 2021

June 5, 2020

2019 was by all accounts a record year regarding US crude oil exports.  The upward trajectory that began after the shale oil boom in 2017 pushed crude exports to historically high numbers with a peak seen in February 2020 at almost 3.7 million b/d of American crude exported to international markets.  These numbers kept lending optimism to market players, with a good example being the various projects we saw announced in the US Gulf regarding building offshore crude loading terminals.

In February though, we were not anticipating the magnitude of the coronavirus spread or the extensive lockdown measures ...

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